Under the accord, the US authorities will clean up a 50,000 sq m patch of contaminated soil near the village of Palomares in southern Spain and transport it to a secure disposal unit in the US.

The two sides "intend to negotiate a binding agreement for a cooperative effort to conduct further remediation of the Palomares site and arrange for disposal of the contaminated soil at an appropriate site in the United States," the statement said.

On January 17, 1966, a US B-52 bomber carrying four nuclear bombs collided with a tanker plane during mid-air refuelling off the coast of Spain, and two thermonuclear bombs fell near Palomares.

Although they did not denotate, they broke up, spreading seven pounds of plutonium over a 200 hectare (490 acre) area.

Under an earlier accord that ended in 2010, Washington paid €314,000 ($350,000) a year for tests for contamination in the region as well as regular blood tests for more than 1,000 Palomares residents.

The agreement announced on Monday is confidential and the details over how the clean up will be carried out, when it will be done and how it will be financed were not released by Spain's foreign ministry. It said, though, that development of the plan was already "very advanced".

The mayor of Palomares, Maria Isabel Alarcon, remained cautious.

"Until we see definitive results, we don't believe in anything," she told AFP.

"People go about their daily lives but after 50 years, we want to close this chapter once and for all."

Green group Ecologists in Action blasted the confidentiality of the agreement and said Washington should be responsible for all the cleanup costs and provide financial compensation for local people.

"The United States is responsible for this accident and for not putting an end to this contamination which was inherited from the Cold War. They should have solved it without any financial contribution" from Spain, said the group's spokesman, Francisco Castejon.